Airbnb flexes new political muscle with plans for 100 home-sharing clubs

SAN FRANCISCO — After fighting off efforts to further regulate short-term  housing rentals in its hometown, Airbnb made clear it plans to flex the company's new-found political muscle using what it learned during the battle.

To start, it plans to launch a national campaign to create 100 home-sharing political clubs in 100 U.S. cities in 2016.

"What took place here in San Francisco has informed us enormously. It's a great lesson and it's also a template for what's to come," said Chris Lehane, Airbnb's global policy chief.

Proposition F would have limited users of Airbnb and other short-term rental websites to renting out rooms, houses or apartments for no more than 75 days a year per unit, down from the current 90 now permitted.

On Tuesday, 55% of San Francisco voters rejected the initiative, which was brought to the ballot by a petition drive. Initiatives require majority voter approval to pass.

The ballot battle was pricey and divided the city, even within neighborhoods.

Airbnb outspent proponents of the measure 8 to 1, putting more than $8.5 million into the fight against Proposition F. Supporters, which included hotel unions, some hotel owners and housing advocates, spent closer to $800,000, according to the Los Angeles Times.

At a news conference Wednesday at Airbnb headquarters in San Francisco's tech-heavy South of Market district, Lehane said it was starting a campaign to extend local homeowners' support of the service to other cities.

The idea was inspired in part as Airbnb saw local hosts self-organize and create the Home Sharers Democratic Club as a chartered club of the San Francisco Democratic Party. That club lobbied against Prop F, alongside Airbnb.

"We're going to build on this momentum coming from San Francisco," Lehane said.

Airbnb will provide dedicated staff and a hotline at its headquarters for these guilds or clubs, as well as access to "the finest grass-roots training," Lehane said.

The clubs will be independent in the company's eyes. "I want to be clear, these clubs are going to be of the people, for the people and by the people," he said.

Lehane framed the broader issue as being one of members of the middle class worldwide looking to monetize their largest single asset, their housing, in a time of rising income inequality.

"This is part of the inexorable march of history. People understand that home sharing in providing a lifeline to the middle class," he said.

ShareBetter SF, the coalition that supported Prop. F, had argued that Airbnb's defense was a red herring.

"Let's be clear: if Airbnb were only about people renting spare rooms, Prop F wouldn't have been on the ballot. The fact is rampant abuse of short-term rentals is taking much needed housing off the market and harming our neighborhoods," spokesman Dale Carlson said before the vote.

The idea that Airbnb is revolutionary is "balderdash," Calrson said. "If revolution means aiding and abetting wanton violations of the law to further your own profits, then yeah, I guess it is a revolution," he said.

Airbnb's Lehane couldn't say which cities would have these clubs or guilds but did mention New York City, where a battle over short-term rentals is currently underway and where Airbnb hosts are already organizing.

Winning the regulatory battle

New technologies such as "sharing economy" companies such as Airbnb and Uber tend to create windows of opportunity for new business models during which the old regulatory regime no longer fits and new regulations will be needed, said Hart Posen, a professor of business at the University of Wisconsin in Madison.

The big companies in this space have long recognized that their success is not simply predicated on superior software or networks "but perhaps more importantly, on winning the regulatory battle," he said.

While these companies are not entirely opposed to regulation, the fight is to define the rules in ways favorable to them.

"These types of regulatory battles will become increasingly common as new technologies make old regulations obsolete. Firms will make ever larger and more high-profile investments in shaping the regulatory environment," Hart said.

Last year Uber, a ride-hailing service that competes with the regulated taxi industry, hired the deputy head of the NYC taxi commission. And Airbnb's Lehane himself is a former White House crisis manager during the Clinton administration, dubbed the "master of disaster."

San Francisco's issues

While Airbnb sees the fight as one to allow hosts to unlock wealth tied up in their homes and apartments, in San Francisco the flash point was more around technology and housing.

In many ways the initiative was a proxy war for a broader fight over the future of San Francisco and what kind of a city it will be in the 21st century. It has long been a bastion of progressive and even experimental politics and lifestyles – one reason it's been such a popular landing place for technologists and the companies they create.

Those techies have brought with them high-paying jobs and money. At the same time, San Francisco has been slow to build new housing units to keep pace with the influx of new residents, in part due to a backlash against indiscriminate urban renewal programs dating back to the 1970s that destroyed some neighborhoods and communities.

The housing shortage combined with new residents created a perfect storm of rising prices. A one-bedroom apartments without parking costs on average $3,000 a month, according to an analysis by the site Rent Jungle. Home prices, too, have gone through the roof. Today, 58% of San Francisco homes are worth more than $1 million, one of the nation's highest percentages, according to the real estate site Trulia.

The San Francisco ballot was awash in propositions about affordable housing and gentrification; six out of 11 measures addressed it in some way.